By Aisha Al-Muslim | @AishaAlMuslim
Bristol-Myers Squibb to Acquire Celgene for About $74 Billion. Overall, the merged company will have nine products with more than $1 billion each in annual sales—most notably Celgene’s multiple myeloma drug Revlimid, which had $7.1 billion in sales through the first nine months of 2018, and Bristol’s lung-cancer treatment Opdivo, which had $4.9 billion over that same period.
The companies said their pipeline includes six expected near-term product launches representing more than $15 billion in revenue potential.
Both companies, though, have had setbacks recently. In October, Bristol announced a delay in a decision by the U.S. Food and Drug Administration to rule on its new drug application for a combination of Opdivo with another Bristol-Myers drug, Yervoy. Meanwhile, Celgene’s share price fell 39% last year following its $9 billion acquisition of Juno Therapeutics Inc. and concerns about Revlimid losing patent protection in the U.S.
Under the deal, Celgene shareholders will receive one Bristol-Myers Squibb share and $50 in cash for each share of Celgene.
Celgene shareholders will also receive one tradable Contingent Value Right for each share of Celgene. Each CVR will entitle its holder to receive a one-time potential payment of $9 in cash upon FDA approval of three drugs. A CVR is often used when buyers and sellers can’t agree on a purchase price and typically tied to sales or regulatory targets.
The cash-and-stock deal represents about a 54% premium, based on the closing stock price of Celgene on Wednesday. The cash portion will be funded through a combination of cash on hand and debt financing. The deal is expected to close in the third quarter.
When the deal is completed, Bristol-Myers shareholders would own about 69% of the combined company, while Celgene shareholders would own about 31%.
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Bristol-Myers’s Chief Executive and Chairman Dr. Giovanni Caforio will continue to serve in those roles of the combined company. Two members from Celgene’s board will be added to the Bristol-Myers board.